Monday, 10 September 2012

They Can't Away With That, Can They?

I am breaking a resolution, to write again about letting agents. The Scottish government recently confirmed it: all ‘premiums’ charged to tenants are illegal. The courts are currently gridlocked with claims because agents refuse to return the money without a fight. So how, exactly will these parasites skim money from the perfectly workable deal between landlord and tenant, across the UK?

Well, in Scotland, they are (seriously…) still charging admin fees, in the full knowledge they’re illegal. A friend contacted me to say that the agent handling his rental would not letting him read the tenancy agreement until the day he moved in - after charging him a holding fee (that he would presumably lose if, after reading the lengthy legal agreement, he objects to its hidden terms.)

There’s also a massive ‘non-returnable cleaning fee.’ This is mentioned repeatedly, and the redoubtable EPTA (see links) and their amazing protest dressed US Marshalls, won a case declaring that this too is unlawful.

Charging a months rent in advance, six weeks rent upfront as a deposit – all legit and customary then. But also slapping on a charge amounting to a third of the last months rent in advance? The law in Scotland limits the amount charged in advance, and this is a way of circumventing the spirit of the law, while giving the landlord an interest free loan. What if the tenants stays for years?

Also – asking for six months rent upfront.

Demanding a holding fee before a viewing, retained if the tenant turns the property down (so very illegal, that one.) Letting agents are relying in London on scarcity of supply, and elsewhere on fear of contesting claims and lack of knowledge by new, young tenants.

Now, landlords should pay all the costs of renting their own home – actually, they already do. So agents are in effect charging both parties for the same transaction. Make that over charging both parties: £150 for a credit check? Credit checking every year? The tenants credit rating is no concern of the agent, frankly. They pay the rent. So stop unnecessary and intrusive annual checks. Anyway, the reason tenants might be able to afford the rent is simple: rents are usually too high.

Another ploy: during a six month tenancy, agents end the existing agreement, booting out the established tenant. The agent collects a ‘finder’ fees for overcharging another poor soul (and also charges the landlord). Oh, and the rent always increases.

Also – as I wrote about elsewhere, agents seem to have been deducting ‘cleaning fees’ from protected deposits, using estimates passed of as receipts, thereby halving the money returned. Meanwhile, wages, are low, working hours long, and people struggle to feed their children. On top of that, tenants are charged extortionate, random (and in Scotland – illegal) fees.

The good news? Everybody: politicians (well not the condems, but what do you expect) even landlords are in agreement: across the UK, including England, letting agents need regulation. The end is nigh for letting agents – you can’t get away with this anymore. They’re on to you. So run!

10 comments:

Besides abolishing fees for tenants, there are 2 simple things that would mean a radical improvement in the service for tenants in England:

1. Rolling contracts offered as standard, with no fixed term

2. All tenancies starting on the 1st of the month.

This is what they do in much of Europe, and it makes obvious sense. (Tenants are required to live in the property for a of 3 months and must give 3 month's notice to leave).

To do this, the Govt must first stop seeing property as the panacea for all financial ills, a pension, a means of cheap credit, a sort of personal bank, which just happens to have beds and people in it.

They should also insist that every landlord renting a property with 3+ bedrooms get an HMO licence; thereby enabling it to be rented to sharers and friends.

And we must, in my view, start building to let, en masse; decent buildings with decent design, that meet people's needs.

Put simply, the needs of tenants, in the long term, must come first now.

It is not acceptable, not decent or right, to expect tenants to put up with things as they currently stand. Inadequate properties, no security of tenure and extortionate arbitrary fees charged by morally corrupt deceitful letting agents.

Agree with all of that. I am still aghast that letting agents, especially in the unregulated badlands of England and Wales, are not being whacked by rules. Agree with rolling contracts: have said it myself, but nobody listens. It's as good as a licenece to print money.

I can see the use of letting agents which manage the property on behalf of the landlord so I wouldn't want to ban them completely. I don't understand why the other type - which just advertises the property on behalf of the landlord still exists in the age of the internet. It did for the High Street travel agent years ago.

Charges to tenants should be illegal, as they are in other industries (job agents can't do it).

Is there one of those petitions on the government website running over this issue?

About Me

I write about everything to do with renting and the buildings tenants live in. Thirty percent of the UK population live in rented accomodation. There are roughly one million landlords in the UK.
We didn't all make it onto to the property ladder. We don't all have a dream home. We move from rented flat to rented flat, dealing with lazy landlords, and neighbours, good and bad. We endure the tribulations of newbuild housing complexes, and the insecurity of never knowing how long you can stay in one place, or indeed, if you want to.
I used to live in Dovecot Towers (so called because it's built stacked up like a dovecot. 'Nice Heights', was great, but I've moved again. I am currently on a sort of research tour.
I hope you enjoy this blog, and thank you for reading.
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